Stokes, connected with said Read, and against any foreclosure of said mortgage, said Edward S. Stokes has deposited with William E. D. Stokes bonds of said Hoffman House to the par value of $150,000." When we read this clause in connection with the rest of the agreement, having in mind the fact that $125,000 of the $150,000 bonds referred to had been deposited some months prior as collateral security for this defendant's notes, we necessarily reach the conclusion that it forms a part of a present agreement, and that the contention that it should be treated as a recital of a prior transaction is without foundation. Indeed, that question was passed upon necessarily in this court in Stokes v. Stokes, supra, when the court held that, by reason of the failure of William E. D. Stokes to perform his part of the agreement, Edward S. Stokes could not be compelled to deposit the $25,000 in bonds required to make the amount $150,000, as provided in the agreement. It could not, of course, have been so held were it the fact that paragraph "sixthly" was but the recital of a prior agreement. But we need not stop to discuss this proposition seriously, for the plaintiff, in his reply, alleges that the said $125,000 of Hoffman House bonds were deposited with, and are still held by, plaintiff in part performance of the contract of August 18, 1891, and for the purposes therein recited, and as set forth in paragraph "sixthly," and further alleges that the defendant has neglected and refused to deposit with the plaintiff $25,000 additional Hoffman House bonds, as required by said agreement.

We are thus brought to the real question of the case, or, rather, to what was a substantial question prior to the decision of this court holding the agreement was without consideration; and that is whether the plaintiff has the right to hold these bonds, under the written agreement of August 18th, as collateral for the Read notes, and as collateral for the guaranties of Stokes against all claims against the Hoffman House by C. H. Read & Co., or John W. Mackey, or any other person, as the creditors of the said C. H. Read & Co., as well as against any foreclosure of the Hoffman House mortgage; for it is very plain that, if the plaintiff is entitled to hold the bonds under this agreement for any purpose, he is entitled to hold them for all the purposes I have mentioned, to hold them until the plaintiff has made good every guaranty contained in that agreement. Unquestionably, the agreement covered these bonds, and, if plaintiff had performed the agreement on his part, he would be entitled to hold them to assure performance on the part of the defendant. But it was the defendant's contention that plaintiff failed to carry out his part of the agreement, and, by reason thereof, there was a failure of consideration; so that the agreement ceased to be binding upon this defendant long prior to the commencement of this action. The evidence relied upon to support this contention consists

of the judgment roll in the action of Edward S. Stokes against William E. D. Stokes, which was put in evidence on the trial. This judgment was not pleaded in bar, as, indeed, it could not have been, for it is not a bar to an action on the notes; but it is insisted that it contains an adjudication between these parties that the plaintiff failed to perform the consideration of the agreement which he now invokes for his protection, and that such adjudication is conclusive evidence of the fact adjudged. The general rule on this subject is well known to be that a former judgment of the same court, or of a court of competent jurisdiction, directly upon the point in issue, is, as a plea, a bar, or as evidence, conclusive between the same parties or those claiming under them, upon the same matter, directly in question, in a subsequent action or proceeding. This has been the rule certainly since the Duchess of Kingston's Case, 11 State Tr. 261. See Gardner v. Buckbee, 3 Cow. 120; Clemens v. Clemens, 37 N. Y. 73; Embury v. Connor, 3 N. Y. 511; Gall v. Gall, 17 App. Div. 312, 45 N. Y. Supp. 248; Harris v. Harris, 36 Barb. 88; White v. Coatsworth, 6 N. Y. 137; Stowell v. Chamberlain, 60 N. Y. 276.

The judgment roll was in an action between the same parties. It was about the same matter, for it involved the right of W. E. D. Stokes to compel the delivery to him of $25,000 of the $150,000 of bends provided for by the agree ment. It was directly in question. Indeed, there was no other question, for the defendant in his answer, as a counterclaim, pleaded that E. S. Stokes had failed to deposit $25,000 of the $150,000 of the Hoffman House bonds as security, pursuant to the provisions of the said agreement, and demanded judgment for the deposit of such additional bonds, or the payment of their equivalent in value. To this counterclaim the plaintiff, E. S. Stokes, made reply, denying that the defendant was entitled to hold the $150,000 of bonds under the said agreement, and alleging that he had failed to carry out his part of the contract. The case coming on for trial, the plaintiff consented that the complaint should be dismissed, but the defendant insisted upon his right to establish his counterclaim, and thereupon was litigated the question relating to the consideration of the agreement, and the right of William E. D. Stokes to enforce its performance. Not only does it appear from the requests to find by counsel for both parties, but also by the findings actually made by the court, that the matter in controversy related to the consideration of the agreement and the right of William E. D. Stokes to insist upon performance thereunder by Edward S. Stokes. The conclusion of law, as found by the court, was to the effect that it was the intent of the parties that William E. D. Stokes should purchase of Read the whole of the 1,963 shares, or such portion thereof as the plaintiff should not buy; and as the defendant had failed to make such purchase within a reasonable time, and, on account of the refusal of Read to sell, could not

is further adjudged that the construction of the contract of August 18, 1891, is that the understanding of the parties was that the defendant should purchase of Read the whole of his 1,963 shares of stock, or such portion thereof as should be sufficient to make the parties to said contract the sole owners of the whole of the stock of the Hoffman House. In other words, the defendant was to buy the whole of the stock, or such portion thereof as the plaintiff should not buy. It is further adjudged that the defendant, not having purchased the said stock of Read within a reasonable time from such contract, and the proof being that he has been unable to purchase, by reason of the refusal of Read to sell, the contract cannot be enforced against the plaintiff."

Surely, it is unnecessary to argue that the question there passed upon by the court was the precise question involved in this case. The only difference between the two cases is that in that case we had $25,000 of the $150,000 involved, while in this one $125,000 of the amount agreed upon is involved. One amount of bonds was larger than the other, but each formed a part of the agreed deposit of $150,000 of bonds. The consideration was not susceptible of apportionment. The contemplated purchase of the Read stock was as much the consideration for the defendant's consent that the $125,000, already deposited, should be held as security under the agreement as was his promise to deposit the additional $25,000 of bonds. If Edward S. Stokes had not deposited any portion of the $150,000 of bonds, the court would have refused to compel their delivery because of the failure of William E. D. Stokes to perform his part of the contract. The fact that William E. D. Stokes had possession of a portion of the consideration, under a prior contract, does not at all affect the situation. So far as this agreement is concerned, all of the bonds were in like condition. The agreement was indivisible, and William E. D. Stokes was as much entitled under it to the $25,000 in bonds as to the $125,000. But all the court could do, in the first case, was to adjudge that there was a failure of consideration, and deny to William E. D. Stokes his claim of right to a specific performance of the contract as to the $25,000 of bonds which had not been delivered. It could not adjudge that the plaintiff was entitled to have delivered to him the $125,000 of bonds for William E. D. Stokes held them, as we have observed, under another agreement, and as collateral security for the notes which are involved in this litigation. All that it could do was to adjudge, in effect, that, by reason of the failure of William E. D. Stokes to perform his part of the agreement, there

was a failure of the consideration, and hence he was not entitled to require Edward S. Stokes to make deposit of such of the bonds as had not been deposited under the agreement. But, in so doing, the court necessarily and conclusively determined that William E. D. Stokes was not entitled to retain, under that agreement, any part of the bonds called for by it; for, as we have observed, the agreement was not divisible, neither was the consideration divided and apportioned to the different provisions of the agreement. In due course, the judgment reached this court; and, while the court was not unanimous in affirming the judgment, yet the affirmance, under our procedure, put at rest all controversy relating to the claim of right on the part of William E. D. Stokes to enforce the agreement. The prevailing opinion of the court, after a careful consideration of the agreement and the subsequent conduct of the parties under it, said: "Ought specific performance under the circumstances be now decreed? We think not. The liability of the plaintiff to the defendant has not been increased. The defendant, through the refusal of Read to sell, has not been able to carry out the understanding of the parties, which formed the real consideration for the deposit with him of the additional collateral. A contract must possess certain elements in order that a court of equity may exercise jurisdiction to compel its performance. must be upon a valuable consideration. must be reasonably certain as to its subjectmatter, its stipulations, its purposes, its parties, and the circumstances under which it was made. It must be, in general, mutual in its obligations and its remedy.' 3 Pom. Eq. Jur. § 1405. The reversal of the judgment by the general term appears to have been based upon a misconception of the facts. In the opinion it is stated that the pledge of the bonds was in consideration of the loan of about $32,000. The fact that the loan was pre-existing evidently had been overlooked."

'It It

The matter having been passed upon by the court, it would be a work of supererogation to attempt a further discussion of the agreement, and the conduct of the parties thereunder, for the purpose of giving further assurance that the decision made was demanded by the facts and the law. The judgment which that decision of the court affirmed has become finally conclusive as evidence as to the questions actually passed upon by the court, and, as evidence, it conclusively determines in this case that the plaintiff is not entitled to hold the bonds under the agreement of August 18th. His only right to the bonds, therefore, at the time de fendant made the tender, was under the agreement of the May preceding, in pursuance of which the bonds were delivered to him as collateral security for the payment of defendant's notes, to enforce collection of which this suit is brought. But, as we have

tiff of the entire sum due on these notes, together with interest and costs, and thereupon he became entitled to their possession. But this possession was refused. The plaintiff claimed the right to hold them under the agreement of August 18th, which claim we have seen was not well founded. It matters not that the plaintiff was of the opinion that he had a right to hold the bonds under that agreement. The test by which it is to be decided whether he converted the bonds or not must be answered as the question of right is determined; and, it being held that the plaintiff was without right to retain the bonds after the tender was made to him by the defendant, it follows that his refusal to make delivery of the bonds, in compliance with the defendant's tender and demand, constituted a conversion of them. The judgment should be reversed, and a new trial granted, with costs to abide the event.

GRAY, J. (dissenting). I agree entirely with the reasoning and conclusion of the Chief Judge, and I should not add anything thereto were it not for what I cannot but think is an oversight on the part of my Brother HAIGHT, with regard to the pleadings and the real issues which were presented to the court below. Judge HAIGHT writes for affirmance upon the specific ground that the defendant failed to show that the bonds in question were delivered to the plaintiff as collateral security for the payment of the four notes in suit, and for no other purpose; in other words, that he failed to prove a negative. It might be sufficient to point out the latter objection, and to say that, where a party avers that bonds were deposited with his creditor as collateral security for a debt, he need only aver and prove the tender of the debt to entitle him to the return of his bonds, and that the burden is on the creditor who claims still to retain them to aver and prove that they were held by him as security for something besides the debt. An averment of the debtor that he deposited the bonds with his creditor as security for the debt, and for no other purpose, is, in legal effect, simply an averment that he deposited them as security for the debt. The words italicized merely emphasize the real facts averred. They are unnecessary, and are, as matter of pleading, surplusage. The debtor is only called upon to prove the fact, and not the irrelevant negative. If the securities are held for any other purpose, it is surely for the creditor to aver and prove the facts tending to establish that other purpose. The doctrine suggested here reverses the ordinary rules of pleading, and the effect thereof upon the trial of the true issues.

But, passing that view, which, however, seems reasonably clear, I find, upon examining the pleadings, that the defendant tendered no such negative issue as my Brother HAIGHT

think it proper to analyze the pleadings, and to point out what I deem to be an inadvert. ence on that head. Judge HAIGHT premises by saying that it is alleged in the counterclaim that, "at the time of the execution of the notes in question, the defendant deposited with the plaintiff, as security therefor," the bonds in dispute; "that such bonds were accepted and held by the plaintiff as collateral security for the payment of the notes, and for no other purpose; that the plaintiff replied by denying that the bonds were deposited with him solely as collateral security for the payment of the promissory notes described in the complaint, and alleged that the one hundred and twenty-five Hoffman House bonds had come into his possession prior to August 24, 1891," when the agreement, dated August 18, 1891, was executed. Upon this statement of the issues Judge HAIGHT bases his conclusion that thus "the burden rested upon the defendant of showing that the bonds were held as collateral security for the payment of the notes in suit, and for no other purpose." In other words, he argues that the defendant tendered the negative issue; that the plaintiff, in his reply, joined issue with the defendant thereon; and that the defendant failed because he did not establish the negative averred.

Now, let us carefully examine the counterclaim and reply, and see whether any such issue was really tendered. In the first place, there is no allegation that, at the time of the execution of the four notes in suit, the defendant deposited with the plaintiff as security therefor the bonds in question; nor is there any allegation that they were accepted and held by the plaintiff as collateral security for the payment of the four notes in suit, and for no other purpose. The allegation is that at the time of the execution of the first three promissory notes, dated May 1, 1891, the defendant deposited with the plaintiff, as collateral security therefor, 100 Hoffman House bonds and 30 United Lines Telegraph bonds. This allegation is undenied in the reply. The next allegation is that afterwards, and as a further security for the payment of these three notes, the defendant deposited with the plaintiff 25 other Hoffman House bonds, making a total of 125 Hoffman House bonds and 30 United Lines Telegraph bonds, "all of which [to quote the counterclaim] were accepted and held by the said plaintiff as collateral security to the said three notes, and for no other purpose." This is the only place in the counterclaim where the words "and for no other purpose" are to be found. Consequently, this is the only negative allegation on the subject. If that allegation tendered an issue as to the negative words, it was an issue as to whether, at that point in the transaction, the plaintiff held the bonds as security for the three notes, and none other.

But, even as to that issue, there is no joinder in the reply. The allegation on that head is in fact undenied. What we find is a denial of something which is not averred. The denial in the reply-and it is the sole denial-is in these words: "Plaintiff denies that the collateral securities described in the answer were de

posited with, and accepted and are held by, plaintiff solely as collateral security for the promissory notes described in said complaint and in said answer, and for no other purpose." It will be observed that the defendant nowhere alleges in his counterclaim that these securities were accepted by the plaintiff, or were ever held by him, as collateral for the promissory notes in suit, and for no other purpose. He expressly alleged that at one time, namely, between May 1, 1891, and August 14, 1891, the plaintiff accepted and held these bonds as collateral security to the first three notes described in the complaint, and for no other purpose; that is, he then held them for the three notes, and for none other. The plaintiff admits this by not denying it. What he pretends to deny is that he holds the securities for the four notes described in the complaint, and for no other purpose. He thus creates an imaginative allegation for the purpose of a fictitious denial. It is apparent that he did this deliberately, and could not have been misled or mistaken about it. In proof of this, we need only look at the allegation of the counterclaim, which immediately follows the words "and for no other purpose." That allegation is that "afterwards," namely, after the acceptance of the bonds as security for the three notes, and for no other purpose, and upon the execution of the fourth note for $4,000, which was dated August 14, 1891, "it was agreed between the plaintiff and defendant that the plaintiff should hold the said 155 bonds as collateral security, also for the payment of the said $4,000 note." Now, this latter averment is entirely undenied in the reply. What, then, does it come to but this: that the defendant alleged, and the plaintiff admitted, that, prior to the execution of this fourth note, the latter held the securities for the payment of the three preceding notes, and for no other purpose; but that, upon the execution of the fourth note, that note was also embraced within the preceding purpose, and, when so embraced, came within the cover of the original security? It will be observed that the defendant no longer avers, at the foot of this allegation, that the bonds are held for the payment of the four notes, and for no other purpose. It amounts to this: that there was, so defendant alleges, no other purpose until the fourth note was executed; and then there was that one other purpose. The sequence here is clear and distinct. The bonds were held from May to August 14th for the three notes, and for no other purpose; but, on August

14th, they were held also for the fourth note. The defendant consequently tendered no issue as to any other purpose apart from and outside of the four notes. I may add that he tendered no such issue even as to the three notes, for the obvious reason that he avers this other and later purpose, which immediately follows the words "and for no other purpose," as these words are used in their proper relation to the intermediate period. Thus, there would seem, upon the pleadings, to have been no question with regard to the Read notes, save such as was presented by the August agreement. As to that, the subject has been fully considered by the Chief Judge; and, as Judge HAIGHT expresses no difference of opinion on that head, I assume that he, too, concurs in the general views there presented as to the effect of that agreement. Certainly, there is nothing in the sixth clause of that agreement which permits us to vary the admitted status as it was prior to its execution.

It was suggested that the sixth clause might be treated as a recital of a past agreement, and not as a present covenant. But this is far-fetched and unworthy of special consideration. The sixth clause is among the numbered covenants, and bears directly upon them. It could not well recite a deposit which did not exist. The only truthful recital which could have been made would have been a recital of the deposit of $125,000 of Hoffman House bonds, as collateral to the $32,000 of Edward's notes. All else is, necessarily, a covenant to make an additional deposit, and to permit both the old (actual) and the new (promised) deposits to operate in due course as security for the additional features, which are specified, as well as for the $32,000 of Edward's notes. To talk of this as a recital, rather than a covenant, is simply to juggle with words. It is impossible thus to get away from the facts, and to twist them into a legal fiction. We thus have an admitted possession of these 155 bonds, down to the August agreement, for an admitted purpose; namely, as security for the four notes in suit. We then have the August agreement for the first time extending these admitted purposes upon a new consideration then moving from the plaintiff, which consideration has failed. It would seem to be a demonstration that the defendant, even if he had not gone upon the stand, was entitled to a verdict for the value of his securities. Certainly, he lost nothing by testifying as he did, in precise harmony with the actual facts. It is said that he should have testified, not merely that he allowed the bonds to remain in the plaintiff's possession under the August agreement, but that they had never previously been in the plaintiff's possession as security for the Read notes. What was there to call for such testimony? There was nothing in the pleadings. There was something in the agreement; but the agreement was dead. The defendant narrated the precise facts, as he had pleaded

them in his counterclaim. It seems puerile to contend that his counterclaim was properly dismissed, because he did not say that the plaintiff had never, prior to the August agreement, held the bonds as security for his contingent liability on the Read notes. No one had asserted or hinted that the plaintiff had ever held them for this contingent liability, except the assertion founded in and upon the August agreement. But, if that August agreement called for testimony on the defendant's part that, though it was dead, yet the plaintiff never (apart from or outside of it) held these bonds for the guaranties specified in the sixth clause, did not the defendant substantially say as much when he told the story in its correct and natural order, and concluded by saying that he allowed the bonds to remain in the plaintiff's possession for the four notes in suit, and for whatever was stated in the August agreement, and for no other purpose? Is he to be deprived of his right at least to have his case considered by a jury, because his words are to be taken literally and technically, rather than reasonably and fairly? It will be observed that his counterclaim was dismissed by the trial judge. It was dismissed without any specification of the grounds, by either counsel or court. There was not an intimation that what the defendant (witness) plainly intended to convey was not adequately expressed. The verdict was clearly directed upon other grounds, relating to the effect of the August agreement and of the previous judgment. There was certainly enough to go to the jury, upon the testimony as given and upon the inference which might legitimately have been drawn therefrom, in connection with the pleadings and the record in the prior action.

I shall add a few words as to the effect of that record. It was argued that Justice Lawrence in that case found as a fact that the bonds were held by William as security for the Read notes, and that that finding is contrary to Edward's otherwise uncontradicted testimony upon the present trial. This is certainly an entire misconception of what appears in that record. Both sides submitted findings to that learned judge. Edward, in his proposed second request, asked him to find that he (Edward) was, prior to August 18, 1891, indebted to William in about $32,000 on his four notes, and was also indirectly liable upon the Read notes as guarantor. At the same time. William, in his proposed second request, asked the judge to find that Edward was indebted to him in a little more than $32,000; namely, in a balance of $34,300, on these same four notes. But William did not add, as Edward had added, in his proposed second request, that he (Edward) was also indirectly liable upon the Read notes as guarantor. In fact, William requested nothing, and asked no finding at all as to these Read notes. Then observe what followed. The learned judge 50 N.E.-23

allowed Edward's proposed second finding, and disallowed William's, giving as a reason that he (the judge) had already found William's second request in finding as he did Edward's second. Now, this was an inaccuracy. The judge had not already found as William requested; for Edward's second finding said that the notes aggregated about $32,000, while William's said that they then aggregated a balance of $34,300. But the only reason why the judge refused to find William's second proposed request was simply because he mistakenly thought it was repetitious. He said he had found it, and therefore refused to find it over again. Now comes the strangest misconception. Edward followed his second request with a third, asking the learned judge to find that the Hoffman House bonds (of $125,000) had been deposited to secure the $32,000 of his (Edward's) notes, and that William held no security to protect the Read notes. The judge substituted for this proposed finding William's third proposed request,-a finding which immediately followed his (William's) second request, and related exclusively thereto. The third finding of William's was absolutely accurate in its relation to his own second finding. It stated that Edward had given William, as security for "the aforesaid indebtedness" (namely, the indebtedness of $34,300, specified in William's preceding second finding), the $125,000 of Hoffman House bonds, and the $30,000 of the bonds of the United Lines Telegraph Company. Edward's third finding was inaccurate, or rather less complete than William's, in omitting these $30,000 of United Lines Telegraph Company bonds. So, the learned judge very properly allowed William's third finding, and substituted it for Edward's less complete finding. This, however, had not the slightest relation to the Read notes, which were not the subject of controversy before the learned judge.

Now, what was the result of this transposition of findings? It was that the "aforesaid indebtedness" referred to by William, in his third request, is no longer the $34,300 of Edward's notes, but is the indebted ness specified in Edward's second finding, namely, his (Edward's) "notes aggregating about $32,000." And yet William now contends that it was Judge Lawrence's intention, by this double substitution,-that is, by the substitution of Edward's second proposed finding for William's second, and the substitution of William's third finding for Edward's third,—to find as a fact that William then held both the Hoffman House bonds and the $30,000 of the United Lines Telegraph Company bonds as security for the contingent liability on the Read notes, as well as the actual indebtedness on Edward's own notes. William has acknowledged throughout, in his reply, when the tender was made, and at the trial of the present action, that he never held the $30,000 of United Lines Telegraph Company